Month: December 2022

Bits and pieces to wrap up December

It was a bearish month for equities, SPX -240pts (5.9%) to 3839.
WTIC cooled by -$0.29 (0.4%) to $80.26. Copper +7cents (1.9%) to $3.81.  The USD weakened by -263bps to DXY 103.27. The US 10yr yield climbed +20bps to 3.88%.

It was a bearish year for equities, SPX -926pts (19.4%).
WTIC gained +$5.05 (6.7%). Copper -65cents (14.6%).  The USD strengthened by +768bps. The US 10yr yield climbed +236bps.

SPX, monthly


A powerful net monthly decline, fully eroding all of the November gains. The December settlement was decisively below the monthly 10MA (4004), as the m/t trend has flipped back to bearish. Momentum subtly ticked upward, but remains deeply negative, and will be a restraint on all bounces.

Whilst the s/t setup offers 3950/4000, more broadly, the bears can argue multi-month price structure is a bear flag. Natural first target is the Oct’ low of 3491, and then psy’ 3K. Any price action <3K would offer something crashy toward the March 2020 low of 2191.

WTIC, monthly


Oil fell for the sixth month of seven, if only moderately lower by -0.4% to $80.26. I’d note the 10MA at $94.04, as oil remains m/t bearish. There is clearly threat of a geo-political inspired hyper spike, much like early 2022. The two key threats to the downside are if the mainstream become increasingly concerned about a looming recession, and renewed dollar strength.

Copper, monthly


Copper climbed for a second month, but I’d note how the November and December candles are both spiky on the upper side – notably from around the monthly 10MA, indicative of s/t bullish exhaustion. I don’t expect any sustained price action >$4.00 in 2023, with far higher threat of a break <$3.00.
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USD, monthly


The dollar fell for a third consecutive month, losing first support of the 10MA. Core support is the psy’ 100 threshold. On balance, I expect that to hold. Grander upside target remain the 120s.
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US 10yr yield, monthly


The US 10yr swung from a December low of 3.42% to settle the year at 3.88%. Things turn interesting back above psy’ 4.00%, as seems probable within January.

The net yearly gain of 236bps is pretty amusing as many were skeptical of even one rate hike (as of end 2021), and instead… we saw seven hikes! An  eighth hike of 25bps to 4.50-4.75%, is due Feb’1st.

Mr Market will NOT be pleased if it starts to believe there will be a ninth or tenth hike. Clearly, that will be largely dependent on whether inflation continues to tick lower, or if it gets stuck within the 7/6s.

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Miscell’ things…

It was pleasing to see the UK’s BMJ call out the lunacy of the shots for the younger demographic. The risk/reward ratio simply NEVER supported it.

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The latest C19 chatter from Jeff and Erika…

As ever, all such cases are anecdotal, but I’d never lightly dismiss any of them.
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Certainly, the Fed are a factor, but they aren’t the be-all. Even if the Chicoms leave Taiwan alone in 2023, there are dozens of wild cards, and its mostly the ones we don’t anticipate that are the most problematic!
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Indeed, most are still very complacent about 2023, with only 9% expecting a net yearly decline, and that is from sp’3839. I could see next year settling around 3K or lower.
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This merited more attention than it garnered.
Whilst many have touted the recovery from spring/summer 2020, its often based using 2020 as the starting point. The fact is, many aspects of the economy never fully recovered… relative to 2019.

Commercial real estate is a key concern for 2023, as regularly highlighted by ‘Walks & Wall street’ >>> https://www.youtube.com/@WalksWallStreet

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Dear Subscriber

Another three day weekend is very much welcome. I’ve sideline entertainment via Bering Sea Gold, and maybe a movie.

… but I do have many posts to complete, and a truck load of end month settlements to highlight.

As ever, feel free to message me via Disqus or email.

Sincerely, enjoy the holiday weekend, and goodnight from London

yours… Philip
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There will be at least two weekend posts, the first will appear Sat’12pm EDT @ https://tradingsunset.blogspot.com, and will detail six of the US equity markets (monthly candle charts). The second will detail ten of the world equity markets, and will likely appear on Sunday.

Twitter: I will endeavour to cover as many of the end month/year individual stock settlements as I can manage, before the futures wheel spins up next Monday at 6pm EST.
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*the next post on this page will be the pre-market brief, Tuesday Jan’3rd, 2023.